Case No.: 140

Doc. Type: Agreements

Parties: IN THE MATTER OF THE COLLECTOR-TREASURER'S OFFICE OF THE CITY OF BOSTON, ET AL.

Date: February 27, 1981


DISPOSITION AGREEMENT


This agreement is entered into between the State Ethics
Commission ("Commission"), and the following officials and
employees of the City of Boston ("the City"): Newell Cook ("Mr.
Cook"), the former Collector-Treasurer and current Auditor of the
City, Dora Fredman ("Mrs. Fredman"), a clerk in the Collector-
Treasurer's Office, Lowell Richards ("Mr. Richards"), the
Collector-Treasurer of the City, and Kenneth Glidden ("Mr.
Glidden"), the First Assistant Collector-Treasurer of the City,
pursuant to Section 11 of the Commission's Procedures Covering the
Initiation and Conduct of Preliminary Inquiries and Investigations.
The parties agree that upon its execution, this Agreement shall
constitute a final order of the Commission, enforceable in the
Superior Court of the Commonwealth.

On December 1, 1980, the Commission initiated a Preliminary
Inquiry, pursuant to Section 4 of General Laws Chapter 268B, into
alleged violations of the Conflict-of-Interest Law, General Laws
Chapter 268A ("Chapter 268A"), by certain officials and employees
of the Collector-Treasurer' Office of the City of Boston
("Treasurer's Office"). Specifically, the Preliminary Inquiry was
initiated after the Commission received a complaint alleging that
a part-time clerk employed by the Treasurer's Office to process
municipal lien certificates, was receiving private fees to expedite
the issuance of said certificates; that the only way to obtain a
certificate within the statutorily required time period was to pay
a private expediting fee; and that these private fees had been
charged and collected for several years with the knowledge and
approval of the officials responsible for the operations of the
Treasurer's Office, and with the full cooperation and participation
of the majority of attorneys who convey real property in the City
of Boston.

The Commission has concluded its Inquiry into these
allegations, and makes the following findings of fact and
conclusions of law to which the parties hereto agree:

1. A municipal lien certificate ("certificate") is a document
furnished by the collector of taxes for all cities or towns of
5,000 residents or more which indicates all taxes and other
assessments, which constitute liens on a particular piece of
property. Almost every transfer of real property entails the
issuance of a certificate.

2. Pursuant to G.L. c. 60, Section 23, certificates are to be
furnished by the collector of taxes within five business days of
application. The fee schedule, set by statute, and in Boston by
ordinance as well, begins at $10 per certificate for vacant land
and land housing single-family structures, and graduates to $100
for commercial properties.

3. The issuance of certificates in Boston is handled by the
Collecting Division of the Treasurer's Office. Prior to July of
1977, the entire operation (receipt of applications and processing
of certificates) was handled by two full-time clerks. Approximately
three years ago, one of the clerks, Dora Fredman, retired at age
70 leaving only one clerk to handle the work, with the occasional

aid of other clerks in the Division. Requests for certificates have
frequently been backlogged because of staff shortages.

4. The Collecting Division issues approximately 6,000
certificates each year. Of the certificates issued during the
period from June 1979-

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September 1980, (the only period for which precise dates were
available), approximately 40% were furnished within the 5 business
day period as required by statute. Most of the other certificates
were issued within a period of from two to four weeks after
application.

5. A sampling of thirteen of the many law firms which
regularly received the certificates which they requested within the
5 day statutory period, revealed that all thirteen firms paid
private "expediting fees" to Mrs. Fredman for prompt processing of
their certificates. The amount of the individual fee paid varied
between five and ten dollars per certificate.

6. Prior to paying these expediting fees to Mrs. Fredman,
several of these firms had regularly paid a similar fee to another
employee of the Treasurer's Office who subsequently retired and
is now deceased.

7. All thirteen firms contacted were of the understanding that
Mrs. Fredman was a part-time or retired city employee who was
authorized to collect these private fees. Few, if any, of the firms
pursued their inquiry into the legality of this arrangement beyond
asking Mrs. Fredman if the private fees were authorized. However,
if they had inquired of anyone in authority in the Treasurer's
Office, they would have been advised that she had been authorized
by officials in the Treasurer's Office to collect private
expediting fees.

8. The issuance of a certificate involves the accumulation of
tax-related information from three city departments: the
Treasurer's Office, the Building Department, and the Public
Improvements Commission. Once gathered, this information, is
recorded on a certificate by the clerks in the Collecting Division
of the Treasurer's Office. The actual collection of the tax data
in each department takes only a matter of minutes, however, the
issuance of a certificate when processed through normal channels,
can take several days or even weeks depending on the
characteristics and history of the parcel of property for which the
certificate has been requested and the length of delays in
circulating the application from department to department. When a
certificate is "expedited," it is processed out of order and the
information necessary to its completion is personally gathered from
the other departments by the clerk doing the expediting. It is
possible to expedite up to twenty (20) certificates in a single day
if those certificates do not present any unusual problems.

9. Although difficult to determine with precision the exact
amount of the expediting fees paid to Mrs. Fredman in the 1978-1980
period, the Commission finds that said payments totaled
approximately $10,000.



HISTORY


10. Subsequent to Mrs. Fredman's retirement in June of 1977,
she approached James Young, then Deputy Mayor for Fiscal Affairs,
and Newell Cook, then First Assistant Collector-Treasurer and asked
if it would be possible for her to return to work in the Collecting
Division to process municipal lien certificates on a part-time,
contractual basis. Because Mrs. Fredman had been an extremely
effective employee, who knew all of the quirks in the system, Mr.
Young hired her back on contract at terms which would be consistent
with the requirements of her retirement.

11. Mrs. Fredman's first contract ran from February 21, 1978
through June 30, 1978 for an amount which was not to exceed $4,000.
Her second contract, again for $4,000, ran from February 26, 1979
through June 30, 1979. Her third contract was increased to a
maximum of $10,000 and became effective on July 7, 1980. Pursuant
to these contracts she was paid $2,280 in 1978, $2,742 in 1979, and
$5,000 in 1980. She also worked from time to time in the
Treasurer's Office, in an uncompensated capacity, during periods
when she was not under the terms of these contracts and after being
permitted to do so as set out in paragraphs 13 and 14 below.

12. None of the aforementioned contracts between Mrs. Fredman
and the City authorized her to collect private fees for her
services in addition to the compensation paid by the City. Each of
the contracts specifically stated that she "shall be considered an
employee for the purposes of G.L. c. 268A (the Conflict-of-Interest
Law)", and directed her attention to the prohibitions of that law.

13. Mrs. Fredman approached Newell Cook in 1978 during the
term of her first contract to ask if she could accept private fees
from a limited number of attorneys who she knew and who needed
expedient certificate delivery. Mr. Cook authorized her to collect
these private expediting fees for work she performed on her own
time. Mr. Cook authorized this arrangement because Mrs. Fredman was
on a contract and

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not in his view a "city employee", and because he felt that this
arrangement would be advantageous to the City by helping to clear
up the backlog of certificates at no additional cost to the City.
When her first contract expired in June 1978, she continued to work
in the Collecting Division on a part-time unpaid basis to service
her private customers for private fees.

14. Mrs. Fredman's 1979 and 1980 contracts were approved by
then Collector-Treasurer Mr. Richards. During the terms of those
contracts, Mrs. Fredman sought and received authorization from Mr.
Richards, and from First Assistant Treasurer Mr. Glidden to
continue to use the facilities of the Treasurer's Office to
expedite certificates for private fees on her own time. Both Mr.
Richards and Mr. Glidden authorized this arrangement because it
appeared to be advantageous to the City in that this expediting
service would not cost the City any money and would help alleviate
the backlog of certificate requests, and because it was their
understanding that the acceptance of expediting fees was a longstanding practice in the Treasurer's Office.

15. Messrs. Cook, Richards and Glidden authorized Mrs. Fredman
to collect these private fees, as noted in paragraphs 13 and 14
above, without checking with or advising Corporation Counsel, and
will full knowledge of the statutory responsibility of the City to
issue certificates within five days of application without the
payment of an expediting fee for that service.

16. Although Messrs. Cook, Richards and Glidden authorized
Mrs. Fredman to collect these private fees, the full extent of her
expediting business was not known to them. Mrs. Fredman's
private clientele grew from the limited number of attorneys whom she had known from the past and for whom she was authorized to expedite
certificates, to a large number of attorneys who regularly conveyed
real property in the City of Boston. She collected expediting fees
throughout 1978, 1979, and 1980: both during the periods when she
was under contract with the City, and also during those periods
when she was not under contract but was permitted to conduct her
private business out of the Treasurer's Office. However, during
those periods when she was not under contract with the City, Mrs.
Fredman also performed numerous official tasks for and at the
direction of the Treasurer's Office, for which she received no
compensation.

17. In addition to authorizing Mrs. Fredman to continue to
collect expediting fees, and for the purpose of establishing an
orderly system for giving priority to the issuance of those
certificates that were needed right away, Messrs. Richards and
Glidden set up a parallel expediting system to be run by the City.
Starting in January 1980, applicants for municipal lien
certificates could pay an additional fee of $10, by certified check
made payable to the City, if they wished to be certain of getting
their certificate within the five-day statutory period. This
"official" expediting fee was never adopted by ordinance and
existed in addition to Mrs. Fredman's private expediting business.

18. The practice of collecting expediting fees, both private
and public, was brought to a stop by the City on October 16,1980,
after being advised by the Commission that the practice raised
substantial questions under Chapter 268A.


CONCLUSIONS


19. The practice of City employees expediting the issuance of
municipal lien certificates for an additional private fee has
existed in the office of the Treasurer of the City of Boston for
many years, predating the employment by the City of the
aforementioned employees and officials, and has been explicitly and
implicitly approved by the Corporate City through and by its
officers and employees. During the years 1978-1980, which were
subject to the Commission s Inquiry, it was unlikely that a citizen
applying for a municipal lien certificate from the City could
obtain that certificate within the 5 day statutory period without
paying a private expediting fee for that servIce.

20. The receipt by city employees, part-time or otherwise, of
private fees to expedite official actions violates Sections 3 and

17 of the Conflict-of-Interest Law, Chapter 268A, because those
fees are paid to city employees for or because of official acts,
and are paid in relation to matters in which the City is a party
and has a substantial interest. The knowledge of those officials
responsible for the actions of the Treasurer's Office, and their
approval of the receipt of these private expediting fees, in no way
exempts those actions from the prohibitions of the law.

Page 38

21. The authorization of this improper practice by the City
and its officials, while not motivated by considerations of
personal gain, nevertheless, tended to undermine public confidence
in government, in that it created the impression that official acts
could be unduly influenced by those willing to pay private fees to
City employees for those acts, and that employees of the
Treasurer's Office were acting in violation of their public trust,
in violation of the standards of conduct for municipal employees
as set out in Section 23(f) of Chapter 268A.

WHEREFORE, the Commission has determined that the public
interest would be served by the disposition of this matter without
further proceedings on the basis of the following representations,
terms and conditions hereby made and agreed to by the parties:

A. The City officials and employees who are parties hereto
will forthwith take such steps as are required, including the
issuance of appropriate executive orders, to insure that

1. The practice of accepting private expediting fees by
employees of the Treasurer's Office will not be resumed;

2. All employees in the Treasurer's office are advised
that the receipt of private fees for public services is
prohibited by the Conflict-of-Interest Law, Chapter 268A,
unless said receipt is specifically authorized by law.

B. The City officials and employees who are parties hereto
will report to the Commission, within 30 days of the execution of
this Agreement, what steps they have taken to implement the terms
set out in paragraph A, above.

End Of Decision